To Dig or not to Dig Surface Owners Rights Versus the Right to Mine - South Africa

In addition, mining often impacts beyond the borders of the mining operation infringing on the rights of other surface owners. This article explores the often competing rights of a surface owner and a prospecting or mining operation by focusing on the relevant provisions of the Minerals and Petroleum Resources Development Act 28 of 2002 (MPRDA), some recent case law, The National Environmental Management Act 107 of 1998 (NEMA) and reference to other relevant legislation.
The MPRDA ushered in some radical concepts including placing all mineral rights under the custodianship of the state. Although the environmental authorisation procedure is not too different from the MPRDA's predecessor, the Minerals Act, 50 of 1991, the duty is placed on the Department of Minerals & Energy (DME) to issue a mining or prospecting right unless there appears to be unacceptable environmental degradation that cannot be mitigated. There is no provision in the MPRDA which compels payment of compensation to surface owners whose land is sterilised or affected by the exploitation of mineral rights. That is not to say that there is no remedy other legislation including the Constitution specifically protects property and environmental rights. The result is that a fundamental conflict is created between the exploitation of minerals (and the rights of the mineral right holder) on the one hand and the use of the surface (and the rights of the surface owner) on the other.
Two recent cases are useful when interpreting the law and trying to understand our court's approach to the conflicting rights of surface owners and mineral right holders.
The Anglo Case
In the Anglo Operations case, the court was asked to consider whether the rights of a mineral right holder included the right to open-cast mining at the expense of the surface rights owner. The court likened a mineral right to that of a quasi-servitude. It held that provided that it is necessary to undertake open-cast mining operations (ie that the mineral could not be mined by any other means such as underground mining) and further provided that the right is exercised in a reasonable way and all precautionary measures against degrading the environment are taken, then the mineral rights holder has the right to pursue open-cast mining operations. The surface owner must endure the inconvenience and impact on its land and business.
In the headnote of the judgment it states that: "It is a settled principle of our law that a right to minerals in the property of another is in the nature of quasi-servitude over that property. As in the case of a servitude, the exercise of mineral rights will almost inevitably lead to a conflict between the right of the owner to maintain the surface and the mineral rights holder to extract the minerals underneath. The answer does not lie in the adoption of the English law doctrine of subjacent support. The correct approach is that this conflict should be determined in accordance with the principles developed by our law in resolving the inherent conflicts between the holders of servitutal rights and the owners of the servient properties. In accordance with the principles applicable to servitudes the owner of a servient property is bound to allow the holder to do whatever is reasonably necessary for the proper exercise of his rights. The holder of the servitude is in turn bound to exercise his rights civiliter modo, that is, reasonably viewed, with as much possible consideration and with the least possible inconvenience to the servient property and its owner.
In applying these principles to mineral rights it can be accepted on good authority that the holder is entitled to go onto the property, search for minerals and if he finds any, to remove them. This must include the right on the part of the holder to do whatever is reasonably necessary to attain his ultimate goal as empowered by the grant. The general rules regarding the content of mineral rights have become crystallised. Open-cast mining does not create an exception to these rules. Accordingly, because open-cast mining is usually more invasive of the surface owners' rights than underground mining, it should only be allowed if it is reasonably necessary. Whether it qualifies as such in any particular case cannot be determined at a theoretical level. Reasonable necessity will always depend on the facts."
The Meepo Judgement
The Meepo judgment also analysed the competing rights of surface and mineral rights holders but from a slightly different perspective. One of the principle issues that the court was asked to consider in the Meepo case was whether proper consultation had taken place in the grant of the mineral rights. In other words, had the applicant consulted properly with the surface rights owner as is required under the MPRDA? The court looked at the meaning of section 5(4)(c) of the MPRDA, which states that no person may prospect or mine without an environmental management plan (EMP), a valid prospecting or mining right and unless he has notified and consulted with the landowner or lawful occupier of the land in question.
The court held that the duty to notify and consult properly with the landowner did exist as in the words of the court: "In our view the consultative process envisaged in Section 5(4)(c) of the act is intended to afford a landowner the opportunity of softening the blow inevitably suffered as a consequence of the granting of a prospecting or other right under the act. This is the only means afforded in the MPRDA to a landowner to protect his rights as such borrowing the mechanisms for the resolution of disputes referred to above."
The court further stated that: "We are accordingly of the view that by the enactment of Section 5(4)(c) of the MPRDA the legislature intended that post the grant of a prospecting right and before the commencement of prospecting activities on any land which is the subject of such prospecting right, proper notice of the intention to enter the land for purposes of prospecting should be given to the landowner followed by a consultative process."
What becomes evident is that the holder of a mineral right has the right to enter into a property and do all that is reasonably necessary in order to exploit the mineral, remove it from the land and benefit the mineral provided that the provisions of the MPRDA (importantly 5(4)(c) relating to consultation) have been complied with. In the Anglo Operations case referred to above, the judge went to great lengths to emphasise the fact that the conflict of rights between the surface owner and mineral rights holder cannot be resolved at a theoretical level and that each case would have to be decided depending on the competing interests.
A surface owner's remedy may lie in analysing the process that the applicant undertook and finding fault with the process. In other words, should the applicant fail to consult properly or should they fail to carry out their obligations in terms of the MPRDA then the process could be challenged. In terms of the MPRDA, an internal appeal lies under section 96 to the relevant authority. If, for example, the regional manager grants the prospecting right and an affected party is aggrieved by that decision, then an appeal lies to the director-general. If the decision is taken by the director-general, then under section 96 the right of appeal lies to the minister.
In addition, the courts have inherent jurisdiction over any decision that is taken by an administrative decision maker under the Promotion of Administrative Justice Act 3 of 2000. If a prospecting licence is granted and a section 96 appeal fails (or should you decide not to appeal) then in order to prevent the prospecting from proceeding, the High Court could be approached for relief. This could take the form of applying for an interdict or of challenging the prospecting right itself most probably on the procedural grounds alluded to above.
Certain sections of the constitution are also relevant, including section 24 (the right to an environment that is not harmful to one's health or well being), section 25 of the constitution (the right not to have one's property arbitrarily deprived), and the common law.
An interesting development is the fact that being the surface owner does not amount to an unlimited discretion to do as one pleases with the land; rather the land is held in trust for future generations. This principle of intergenerational equity was recognised by the Zimbabwe courts and the principle confirmed by our courts where the court held: "In the environmental context, the potential ambit of a right to well-being is exciting but potentially limitless. The words nevertheless encompass the essence of environmental concern, namely a sense that we ought to use the environment in a morally responsible and ethical manner. If we abuse the environment, we feel a sense of revulsion akin to the position where a beautiful and unique landscape is destroyed or an animal is cruelly treated. The attainment of this objective or imperative confers upon the authorities a stewardship, whereby the present generation is constituted as the custodian or trustee of the environment for future generations".
The principle of cooperative governance together with specific provisions of the MPRDA mean that other authorities (water affairs and environmental authorities) must be consulted when any application for a prospecting or mining right is being considered.
The Powers of DME Versus Deat
There has for some time been a power struggle between the DME and the Department of Environmental Affairs & Tourism (DEAT) as to which authority is responsible for the environmental authorisation of mining activities. Currently, for mining to take place, the DME must approve the EMP (under the MPRDA) while DEAT approves the EIA (under NEMA). In terms of draft legislation, this position will change - the DME will be designated as the competent authority to approve environmental authorisations under NEMA. A right of appeal then lies to the Minister of DEAT.
The Xolobeni Project
It is an intricate and interesting web and this is just a taste of some of the legal issues. One wonders then how projects such as Xolobeni are so easily authorised. The latest development there seems to be that as a result of the appeal lodged by the Amadiba Community, the applicant has been instructed to conduct further public participation particularly with the affected community.
ABOUT THE AUTHOR: Adam Gunn
Adam Gunn is a partner at Routledge Modise in association with Eversheds and heads up the firms environmental law department. He specialises in all aspects of environmental law and successfully lobbied government to amend the taxation treatment of environmental expenditure (section 48 of the Revenue Laws Amendment Act, 2007; new section 37B of the Income Tax Act, 1962). Adam is a non-executive partner of Watermark Global Plc.